AFD and Cameroon by Agence Française de Développement

Schoolchildren © Yaoundé Agency

AFD AND CAMEROON

Working together for a sustainable future

Cameroon Cameroon is a Central African country covering an area of 475,650 km2. It is triangular in shape and extends over 1,200 km from the Gulf of Guinea to Lake Chad. Its geographical location, at the junction of Western, Central and Northern Africa, explains the diversity of its landforms, where highlands alternate with lowlands, its climate, which varies from tropical to Sahelian depending on the areas, and its vegetation, with a blend of forests and savannahs from the South to the North. With such diversity, it is often referred as “Africa in miniature”. With 20 million inhabitants, 420 km of coastline along the Atlantic Ocean, and substantial potential and resources (energy and minerals, agriculture and livestock, forests…), Cameroon is a bilingual country that plays a leading role in Central Africa, particularly for trade. The country accounts for roughly half of GDP in the CEMAC zone (Economic and Monetary Community of Central Africa) and continues to be the most diversified economy in the region. Cameroon has experienced steady growth in recent years, but it is structurally insufficient (an average of 3 to 4% over the past 5 years) for significant progress to be made in per capita income and in order to reduce the poverty rate, which has been stagnant since 2001 at 40% of the population. After reaching completion point under the “Heavily Indebted Poor Countries Initiative (HIPC)” in April 2006, thereby benefiting from the cancellation of a large part of its bilateral and subsequently multilateral debt, Cameroon now aspires to joining the category of emerging countries by 2035. This prospect means that the country more than ever faces the challenges of developing its infrastructure, diversifying its economy, consolidating its growth, reducing poverty and achieving sustainable development.

AFD Group operates in Cameroon with five sectoral priorities: R ural development and agriculture; I nfrastructure (urban development, transport, water and sanitation, energy);

AFD GROUP’S COMMITMENT IN CAMEROON

T he productive (private) sector; S ocial sectors (health, education and vocational training);

Cameroon and France have a special relationship and an extensive and long-standing partnership. It is under this partnership that Agence Française de Développement (AFD) – the main operator of France’s official development assistance mechanism – works to support Cameroonian communities. Building on its presence alongside Cameroon for over fifty years, AFD provides its technical support for the definition and implementation of public policies. It also finances economic and social development programs and projects led by public and private stakeholders, local authorities, associations and NGOs. AFD’s office in Yaoundé and PROPARCO’s office in Douala (AFD’s private sector financing arm) are the contact point for the local relationship with AFD’s many partners in Cameroon. AFD’s strategy reflects the policy of partnership and solidarity defined by France in its “Development Cooperation Framework Document” and addresses the Millennium Development Goals (MDGs). It is in line with the priorities of Cameroon’s public authorities, as set out in the “Growth and Employment Strategy Paper (GESP)”. This long-standing and very strong cooperation makes Cameroon one of the main beneficiaries of AFD Group financing. AFD has always stood alongside Cameroon and has supported its economic and social history, during both its growth phases and its periods of difficulty. Since 2006, the year in which the first “Debt ReductionDevelopment Contract (C2D)” was signed, the volume of AFD Group commitments has totaled over FCFA 942bn (EUR 1,436m), i.e. an annual average of roughly FCFA 135bn (over EUR 200m).

E nvironment and biodiversity. Over the past five years, AFD’s disbursements have reached an annual average of some FCFA 50bn (over EUR 75m).

AFD Group financing authorizations in Cameroon by sector (2006 to 2012) 21 125 88 34 63

73 113

In bn FCFA 424

S upport to the Productive Sector (EUR 112m) E nvironment and natural resources (EUR 32m) A griculture and food security (EUR 173m) Infrastructure and urban dev. (EUR 646m) H ealth and the Fight against AIDS (EUR 90m) N on-sector specific (EUR 52m) E ducation and technical and vocational training (EUR 115m) Water and Sanitation (EUR 191m)

AFD Group financing authorizations in Cameroon by financial product (2006 to 2012) 9

C2D grants (EUR 772m)

48 56

288

In bn FCFA

S overeign loans (EUR 439m) N on-sovereign loans (EUR 86m)

507

G uarantees (EUR 73m) P roparco (EUR 53m) Grants, including NGOs (EUR 14m)

AFD Group projects are designed to benefit the entire population of Cameroon and all its regions. They are implemented in accordance with the principles of aid ownership, effectiveness and harmonization. They are based on a demanding Social and Environmental Responsibility (SER) approach and on involving civil society and elected officials.

AFD GROUP INSTRUMENTS AFD Group implements a wide range of financial instruments in Cameroon with the aim of achieving sustainable and inclusive development objectives: The Debt Reduction-Development Contract (C2D); L oans to the State of Cameroon and public and private enterprises; E quity investments to support the capital base of companies; G rants to associations and NGOs; G uarantees to banks and microfinance institutions to promote access to credit for small businesses; G rants from the French Global Environment Facility (French GEF), which AFD manages. This range of financial instruments is accompanied by: T raining provided by the Center for Financial, Economic and Banking Studies (CEFEB): professional Master’s programs or short-term training courses, which have already benefited over 350 Cameroonian executives; A FD’s participation in national sectoral and cross-cutting strategic thinking; A FD’s contribution – based on its experience in Cameroon – in the debate and in intellectual production on development topics. AFD also contributes to a number of regional projects from which Cameroon benefits, such as projects to support CEMAC.

It participates in multi-donor programs and cofinancing operations, for example, with the African Development Bank (AfDB), Central African States Development Bank (BDEAC), European Investment Bank (EIB), World Bank (WB), German cooperation... Sustainable development is a constant concern for all AFD’s financing operations in Cameroon.

AFD’S PROGRAMS AND PROJECTS IN CAMEROON Developing hydropower potential Cameroon holds exceptional hydropower potential, which it is seeking to develop. The bulk of this potential is located in the Sanaga Basin. The Lom Pangar hydropower project aims to develop this hydropower potential by increasing the regulated flow rate of the Sanaga, which is guaranteed during the dry season, raising the installed capacity in the East region by 30 MW, and giving 2,400 households access to electricity. At completion, the project will have a positive impact on: C ameroon’s economy, by allowing the development of high added value activities, such as the aluminium industry; T he country’s energy mix which, by replacing thermal sources with hydropower, will have lower carbon emissions; T he extension of electrification in rural areas. The total cost of works is estimated at approximately FCFA 300bn (EUR 457m) and AFD has provided FCFA 39.4bn (EUR 60m) of cofinancing. AFD’s financing is earmarked for the implementation of the Environmental and Social Management Plan (ESMP) for the project according to international standards, the control of works and capacity building for the contracting authority, the Electricity Development Corporation (EDC).

C2D: AN INNOVATIVE MECHANISM FOR DEVELOPMENT FINANCE The Debt Reduction-Development Contract (C2D) is Cameroon’s main program for the cancellation and reconversion of its external debt. France, through this innovative mechanism, has decided to make an additional bilateral effort to the “Heavily Indebted Poor Countries (HIPC)” debt alleviation initiative. In practice, the two countries decide to earmark amounts from the cancellation of the bilateral debt to finance investment programs focusing on poverty reduction. The C2D allows both countries to establish a constructive dialogue on development policies, working closely with Cameroonian

and French civil societies for the supervision of the different programs. Two Debt Reduction-Development Contracts, totaling FCFA 352bn (EUR 537m) and FCFA 214bn (EUR 326m) respectively, were successively signed in June 2006 for the first, and July 2011 for the second. They have led to various operations in a number of sectors (agriculture and rural development, infrastructure and urban development, health, education and vocational training, forests and environment) and have thereby supported growth and ustainably improved living conditions for Cameroonians.

In addition to financing the Lom Pangar dam, which focuses on SER actions, AFD is a major partner in Cameroon’s power sector (financing of AES Sonel’s investment programs and the Kribi thermal power plant).

Facilitating business investment The private sector is the main growth driver, as it creates employment, economic added value and revenue for the State. Its efficiency is decisive for other sectors. It also complements public policies by providing essential services. It is becoming increasingly central to environmental, social and governance concerns.

HYSACAM AND THE CLEAN DEVELOPMENT MECHANISM (CDM) Hysacam, a leading company in the urban waste collection and treatment sector in Cameroon, has benefited from an ARIZ guarantee for its greenhouse gas recovery project at the Nkolfoulou landfill in Yaoundé. It is one of the most emblematic examples of the success of ARIZ in Cameroon. By recovering and burning the methane produced by this landfill, the company, its partner bank (SGBC) and AFD are participating in the fight against climate change.

AFD has been supporting the private sector for several decades, alongside its subsidiary PROPARCO.

Supporting sustainable forest management and biodiversity

AFD and PROPARCO promote private sector investment by offering a wide range of financial instruments tailored to the needs of companies, whatever their size: equity, long-term loans, credit lines, guarantee tools, risk capital…

43% of the surface area of Cameroon, i.e. 22.5 million hectares, is covered by forests, including 16.9 million hectares of dense forests. The forest sector is of fundamental importance to Cameroon. It accounts for over 6% of GDP.

In Cameroon, AFD Group’s activities to support the private sector are based on the following areas:

Forest product exports account for roughly 30% of non-oil domestic exports. The sector makes a substantial contribution to employment: roughly 13,000 people in the formal sector and 150,000 in the informal sector.

S upport for banking intermediation to finance SMEs (in particular via the ARIZ risk-sharing mechanism and by providing long-term resources to financial institutions); T he development of the micro and mesofinance sector; P ROPARCO’s financing of key enterprises at the national level, according to the principle of subsidiarity in terms of local banks. AFD’s risk-sharing mechanism (ARIZ), implemented in Cameroon in partnership with banking institutions (SGBC, BICEC and SCB Cameroon) and microfinance institutions (ADVANS Cameroon), facilitates access to investment loans for Cameroonian enterprises. Since 2001, over 800 small and medium-sized enterprises have been financed, with the amount of guaranteed loans totaling over FCFA 51bn (EUR 78m), making Cameroon the second largest beneficiary of the ARIZ mechanism in the world. PROPARCO is supporting 5 projects for a total portfolio amount of FCFA 32.3bn (EUR 49.2m). It has, for example: P articipated in financing the investment programs of CAMRAIL (FCFA 4.3bn – EUR 6.5m), AES SONEL (FCFA 19.7bn – EUR 30m), KPDC (FCFA 6.6bn – EUR 10m), SOCAPALM (FCFA 1.5bn – EUR 2.3m) and ALIOS FINANCE (FCFA 0.3bn – EUR 460,000); Made equal investments in several Cameroonian enterprises in the banking and insurance sectors, as well as in the agri-food industry.

Building on over 20 years of experience of operations in the Congo Basin, since 2004, AFD has allocated some FCFA 31bn (EUR 47m) to Cameroon’s forest sector. The programs financed are part of the national policy implemented via the Forest & Environment Sector Program (FESP). AFD, through the first Forest-Environment C2D, (FCFA 6.5bn – EUR 10m) has contributed to the development of some 5.4 million hectares of production forests, the fight against poaching and illegal logging, biodiversity protection, natural heritage development and to management capacity building for public and private sector forestry activities. Under the second FESP support operation from the first C2D, AFD has provided FCFA 7bn (EUR 10.7m) of financing for a three-year project (2013-2015) to develop and monitor forest cover in connection with the REDD+ strategy. At completion, the expected outcomes are: C apacity building for forest administration officials and forest managers from the private sector; I mproved quality for the development plans and their supervision by the administration; C reation of an economic observatory for the forest and wildlife sector in order to gain a better knowledge of the sector and develop forecasting and decision-making tools.

The Deng Deng forest reserve, located near the Lom Pangar dam reservoir project in the East region of Cameroon, is populated by gorillas, a species on the International Union for Conservation of Nature’s (IUCN) Red List of Endangered Species. AFD has allocated a FCFA 492m (EUR 750,000) grant, which has financed the creation of the Deng Deng National Park in order to protect gorillas from poachers and from the dam workers settling in the area. This financing has also helped improve the state of scientific knowledge on large primates. AFD’s financing for the Environmental and Social Management Plan (ESMP) for the Lom Pangar dam also includes FCFA 3.3bn (EUR 5m) earmarked for the management of the Deng Deng forest.

Improving access to quality education for all Cameroon has one of the highest nursery and primary enrolment rates in Sub-Saharan Africa. However, this good performance is counterbalanced by geographical disparities with respect to facilities and the distribution of teachers. This has a direct impact in terms of grade completion, lower quality education and gender inequalities. Consequently, the Cameroonian Government is making considerable efforts to increase the number of classrooms and assign more teachers in regions that are lagging behind. They benefit from AFD support via FCFA 59bn of C2D financing (EUR 90m). AFD is supporting a policy to gradually integrate 37,200 temporary teachers into the public service and is financing an extensive school construction program, the largest it has ever financed in the world. It aims to build, refurbish and equip some 2,300 classrooms. The C2D has also helped improve the quality of teaching by providing 13,000 textbooks, along with teaching guides, for core subjects (mathematics and languages) in the first two grades of the primary cycle. These kits are intended for classroom teachers and benefit all public primary schools nationwide. FCFA 3.6bn (EUR 5.5m) of support has been allocated for the institutional strengthening of the Ministry of Basic Education to improve its capacity to monitor and manage the education system by providing training, equipment, and national and international expertise (review of primary education curricula, definition of reforms to the system for pre‑service training for primary teachers and pedagogical supervision, resumption of the national collection of school statistics…).

Infrastructure allows people to be mobile, goods to be transported and gives access to basic services, such as water, electricity and sanitation. This is why it is a core component of Cameroon’s economic and social development strategy. AFD is financing investment programs, via the Urban C2D (FCFA 75.4bn – EUR 115m) and Road C2D (FCFA 75.4bn – EUR 115m), as well as through loans, for the transport sector (railways, road networks, rural roads, engineering structures, ports…) and urban development sector (road systems, crossroads, water, drainage…) that facilitate exchanges and mobility and improve living conditions for urban dwellers. The second C2D is mobilizing some FCFA 73bn (EUR 111m), with the aim of ensuring that the projects implemented are sustainable and of extending them to regional cities. In 2008, the bridge over the Wouri in Douala benefited from refurbishment works financed by AFD. AFD is now supporting the construction of a second bridge (FCFA 87.2bn – EUR 133m), which will be a landmark in the urban landscape of Douala. Its financing also concerns access to the economic capital from the East and West (FCFA 88.6bn – EUR 135m). AFD is cofinancing (FCFA 40bn – EUR 60m) Camwater’s program to upgrade water facilities in Yaoundé, Édéa, Bertoua and N’Gaoundéré. It is also providing financing to the Urban Community of Douala for the implementation of an extensive stormwater drainage project in flooded neighborhoods (FCFA 85.3bn – EUR 130m).

AFD IS SUPPORTING THE URBAN COMMUNITY OF YAOUNDÉ (UCY) FOR ITS REFLECTION ON WASTEWATER MANAGEMENT AFD is financing the updating of the study for the Wastewater Master Plan for the City of Yaoundé in order to take account of land changes in the city over the past 20 years, the population increase, the Urban Plan produced in 2008 and the national sanitation strategy. This study will lead to an investment program focusing on the construction of sludge unloading and treatment stations, the construction of sanitary facilities (schools, clinics, markets, prisons…), the construction of wastewater collection systems and the refurbishment and construction of wastewater treatment plants.

Construction works © Yaoundé Agency

PRESERVING WILDLIFE

Promoting exchanges, mobility and better living conditions

Cameroon – the storehouse of Central Africa – holds significant agricultural potential, both in terms of food crop production and crop exports. The agricultural sector plays an extremely important role in Cameroon’s economy. It employs almost 60% of the working population and accounts for roughly 20% of gross domestic product. In view of these issues, agriculture is a focus sector for the first and second C2D: FCFA 124bn (EUR 189m) have been earmarked for the sector for 2006-2016, including 60% under the second C2D.

PROGRAM TO INCREASE THE COMPETITIVENESS OF AGROPASTORAL SMALLHOLDINGS (ACEFA) Since 2008, FCFA 14.1bn (EUR 21.6m) have been mobilized from the 1st C2D to support ACEFA. A new FCFA 55.7bn (EUR 85m) financial package, including FCFA 38bn from the 2nd C2D and a FCFA 17.7bn sovereign loan, will allow the program to be extended nationwide. ACEFA is developing the agricultural dissemination approach towards advisory support for farms and their community groups, based on a system jointly managed by the administration and the profession. ACEFA supports producers’ projects by offering grants to partially finance productive investments. Some 1,500 projects for an average amount of FCFA 3.3m (EUR 5,000) have already been financed by ACEFA.

Supporting family farming dynamics and the equipment of local authorities Dense forest in East Cameroon

NATIONAL PARTICIPATORY DEVELOPMENT PROGRAM (NPDP) This national program to support decentralization which targets the municipality as the first level of local development, has benefited from a FCFA 13bn (EUR 20m) C2D contribution. The first phase of the program focused on six Regions (Center, South, West, Adamaoua, North and Far North) and was extended nationwide during the second phase, which began in 2010 and benefits from some FCFA 38bn (EUR 57.7m) of financing. The NPDP provides technical and financial support to municipalities, training for elected officials, defines municipal development plans and implements microprojects considered as priorities by communities and their elected representatives. The ultimate objective is to give municipalities the financial and technical capacities to control their development and thereby prepare the decentralization promoted by the Government of Cameroon. The NPDP has already financed over 1,000 microprojects selected by the beneficiaries in a wide range of sectors: W ater (standpipes, wells, boreholes...); E lectrification in dozens of municipalities; C ommercial infrastructure (markets, bus stations...).

The programs aim to make smallholdings more competitive, train and professionally integrate young people, build the capacities of administrations, sustainably manage soil fertility, support agronomic research and equip local authorities with infrastructure.

SOIL CONSERVATION PROJECT IN THE NORTH (SCP) The Soil Conservation Project in North Cameroon (SCP) has benefited from FCFA 5.9bn (EUR 9m) of financing. It has been implemented by Cameroon’s Cotton Development Company (Sodecoton) and has promoted sustainable soil fertility management in the cotton-producing area. The SCP has conducted activities to develop cultivated plots (stone bunds, grass strips, hydraulic structures…), which limit erosion and improve water management. It has disseminated the use of organic compost and the techniques of direct seeding mulch-based cropping systems (DMCs), which reduce tilling and sustainably improve the organic fertility of plots.

Promoting training provision tailored to business needs The initiative to strengthen vocational training provision is the result of an innovative partnership between the Government, the private sector and the Inter-Employers Group of Cameroon (GICAM) and is a priority focus for the second C2D. FCFA 16.4bn (EUR 25m) have been mobilized to create sectoral vocational training centers (industrial maintenance, logistics, transport and agro-food trades) and to set up training centers in rural areas (light mechanical work, electricity, management…). AFD’s approach is to promote public-private partnerships. It provides substantial support to investment projects led by private institutions recognized for the quality of their training provision. It supports the development of training provision by the Higher Institute of Technology of Central Africa (IST-AC), the Catholic University of Central Africa (CUCA) and Montagnes University (UdM).

L’ICY: OFFERING HIGHER EDUCATION TAILORED TO THE NEEDS OF THE ECONOMY Since it was founded in 1991, “the Catholic Institute of Yaoundé (ICY)” has been the only private higher education institution in Cameroon to have a status equivalent to a fully-fledged public university. It has regional outreach. The project to extend and refurbish the Ekounou campus is part of a 10-year program for 2012-2021 to develop ICY’s activities. This project comprises the refurbishment of existing buildings and the construction of a residential campus. It will improve the quality of human capital formation at management level for private operators and the public sector.

L’UdM: MEETING THE SKILLS REQUIREMENTS OF THE HEALTH INDUSTRY AND SERVICE SECTORS

L’IST-AC: TRAINING AFRICAN GENERALIST ENGINEERS IN AFRICA, FOR AFRICA

“L’université des montagnes (UdM)” was opened in 2000 at the initiative of the “Association for Education and Development (AED)”, a not-for-profit association governed by Cameroonian law, with the aim of meeting skills requirements in the health, science and technology sectors. An AFD loan is financing the project to extend and modernize UdM. The investment comprises the construction of five teaching and administrative buildings, a residence, a university restaurant and medical buildings for the”université des montagnes” Hospital, which is part of UdM.

AFD is supporting the development of the training offered by the Catholic Institute of Arts and Trade (ICAM) in the technical and scientific sectors, where there are labor shortages. In 2002, ICAM Group, in partnership with the Catholic University of Central Africa (CUCA), founded the Higher Institute of Technology of Central Africa (IST-AC), which benefits from financial support from a number of private and public industrial companies in the sub-region.

To date, UdM has already put several hundred doctors, pharmacists and technology graduates (biomedical engineering, IT and networks, networks and telecommu nications) on the labor market.

Scaling up sustainable access to healthcare Improving the health status of the population of Cameroon is more than ever an objective for economic growth and social development, despite the progress achieved over the past decade. For example, life expectancy at birth, estimated at under 55 in both 1987 and 2005, fell to 51 in 2011. Similarly, according to the latest “Demographic and Health Survey” conducted in 2011, the maternal mortality indicator has risen in recent years, with a ratio increasing from 430 deaths for 100,000 live births in 1998 to 669 deaths in 2004 and 782 in 2011. The Government of Cameroon has reacted to this situation by reviewing its Health Sector Strategy for 2001-2010 and its objectives have been updated to cover up to 2015, particularly with a view to achieving the Millennium Development Goals (MDG) to reduce infant and child mortality, improve maternal health and combat HIV/AIDS, malaria and other diseases.

IST-AC has been established in Douala and Pointe-Noire since 2002, with 36 students per year. It aims to raise its student numbers to 60 in Douala and 48 in Pointe Noire. This increase in intake capacity requires the construction of teaching buildings and university residences in both cities. These different projects aim to contribute to limiting the brain drain in the sub-region by offering a credible alternative to studies in Europe or North America.

As part of a harmonized sector-wide approach (SWAp), the Health C2D, which benefits from FCFA 59bn (EUR 90m) of grant financing, is supporting the implementation of the five strategic components of this sectoral policy (strengthening the health system, disseminating “Minimum and Supplementary Packages of Activities” in health districts, developing an operational referral system, strengthening partnerships and stimulating demand). The Health C2D also specifically focuses on regions where health indicators are low, for example the Northern region (Adamaoua, North and Far North regions). It finances activities to combat communicable diseases (Expanded Program on Immunization, AIDS). It contributes to developing partnerships, particularly public-private partnerships (Esther, Centre Pasteur, Catholic Health Service of Cameroon, Council of Protestant Churches of Cameroon, Ad Lucem Foundation...) and to building capacities of the Ministry of Health. Special attention is given to reducing maternal and infant mortality. Since 2012, innovative solutions have been implemented, such as access to “obstetric kits”. The refurbishment and equipment of health facilities and support for midwifery training are also part of this initiative.

Agence Française de Développement (AFD) is a public development finance institution that has been working to fight poverty and foster economic growth in developing countries and the French Overseas Communities for seventy years. It executes the policy defined by the French Government. AFD is present on four continents where it has an international network of seventy agencies and representation offices, including nine in the French Overseas Communities and one in Brussels. It finances and supports projects that improve people’s living conditions, promote economic growth and protect the planet, such as schooling for children, maternal health, support for farmers and small businesses, water supply, tropical forest preservation, and the fight against climate change. In 2011, AFD approved nearly €6.9 billion to finance activities in developing countries and the French Overseas Communities. The funds will help get 4 million children into primary school and 2 million into secondary school; they will also improve drinking water supply for 1.53 million people. Energy efficiency projects financed by AFD in 2011 will save nearly 3.8 million tons of carbon dioxide emissions annually.

AFD CAMEROUN Plateau Atémengué – BP 46 Yaoundé Tél. : (237) 22 22 00 15 / 22 22 23 34 Fax : (237) 22 23 57 07 afdyaounde@afd.fr http://cameroun.afd.fr

www.proparco.fr

PROPARCO, AFD’s subsidiary dedicated to private investment, promotes private investment in emerging and developing countries in order to boost growth, promote sustainable development and reach the Millennium Development Goals. Its financing is tailored to the specific needs of investors in the productive sector, financial systems, infrastructure and private equity investment.

FFEM

5 rue Roland Barthes 75598 Paris Cedex 12 – France Tél. : +33 1 53 44 31 31 Fax : +33 1 44 87 99 39 www.afd.fr

www.ffem.fr

FFEM is a bilateral public facility set up by the French Government in 1994 following the Rio Summit. It aims at promoting global environmental protection via sustainable development projects in developing or transition countries. The French Global Environment Facility supports physical projects in recipient countries. Its operations are learning-based and support experimental, innovative or exemplary approaches.

This brochure respects the environment and was printed using vegetal ink on PEFC™ certified paper (sustainable forest management).

Creation: Planet 7 – March 2013

AGENCE FRANÇAISE DE DÉVELOPPEMENT (AFD)